NRF asks Obama for national sales tax holidays

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NRF asks Obama for national sales tax holidays

December 23, 2008

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Washington--The National Retail Federation (NRF) today asked President-elect Barack Obama to incorporate a series of national sales tax holidays into upcoming economic stimulus legislation as an important step toward rebuilding consumer confidence.

The NRF proposed that tax holidays be held during March, July and October 2009, each lasting 10 days including two weekends. Tax-free treatment would apply to all tangible goods subject to a state sales tax ranging from apparel and home furnishings to restaurant dining and automobiles, but would exclude tobacco and alcohol. The federal government would reimburse the 45 states that have sales taxes for the lost revenue and would provide the five states without a sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon) with revenue approximating the sales tax reimbursement that would be received by states with similar populations.

State sales tax rates range from 2.9 percent to 7.25 percent and add $236 billion a year to the amount U.S. consumers pay for goods and services, according to the U.S. Census Bureau. By temporarily lifting the sales tax for the three 10-day periods, the NRF estimates that consumers could save nearly $20 billion. Based on the 112.4 million households in the United States, the figure would amount to almost $175 for the average family.

In addition to saving consumers money, the sales tax holidays would help support the 25 million jobs in the U.S. retail industry, or one out of every five U.S. workers, and millions of jobs in industries that supply retailers with merchandise and services, according to the NRF.

The NRF also called for infrastructure investment in roads, rails, ports, public schools and renewable energy projects, saying it would have a double benefit of creating jobs and repairing systems that are critical to commerce.

The letter was signed by NRF Chairman Myron E. "Mike" Ullman III (J.C. Penney chairman and CEO), NRF First Vice Chairman Philip L. Francis (PetSmart Inc. chairman and CEO), NRF Second Vice Chairman Stephen I. Sadove (Saks Inc. chairman and CEO) and NRF President and CEO Tracy Mullin.

The NRF is the largest retail trade association in the world, with members including department, discount, drug, grocery, independent and specialty stores, catalog merchants, chain restaurants and e-tailers, as well as the industry's key trading partners of retail goods and services.

For more information about the NRF, visit its Web site, NRF.com.

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